This contribution revises Monte-Carlo based simulation techniques as used in BusinessTaxation and Accounting literature, most prominently proposed by fellows ofTherefore, we focus on a methodically orientated discussion. Our results suggestthe standard approach leads to biased estimates of expected discounted tax paymentsassuming cash flow uncertainty and incomplete loss-offset regulations. We built upcritique by giving an analytical expression for expected discounted tax paymentsformulating the structure of probability weighted tax states in the future conditionalcash flows above or be-low zero. Consequently, this enables us to evaluate the resultsobtained from the standard Monte-Carlo approach within a numerical analysis.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number
Ifo Working Paper No. 73.
Find related papers by JEL classification: G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Investment Policy H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law